Fair Saga Heads to Two Courtrooms

By |November 17, 2010

Orange County Fair vendors on Wednesday morning will be asking a local Superior Court Judge to cancel the state sale of the Fairgrounds to a private bidder. They are also asking a Sacramento County judge to force disclosure of state records regarding Fairgrounds negotiations.

“The RFP II was a sham RFP designed to implement a backroom deal in favor of FMW [Facilities Management West],” are the first words in the arguments presented by Advanced Real Estate Services, American Fairs and Festivals, Tel Phil Enterprises and Jeffrey Teller in Orange County Superior Court. (RFP and RFP II refer to requests for proposals.)

Jeffrey Teller runs the OC Marketplace swap meet, which is owned by Tel Phil Enterprises and is the Fairgrounds’ biggest year-round tenant. Teller was the principal behind American Fairs and Festivals, which was itself the first successful bidder to the state RFP process on the Fairgrounds. Advanced Real Estate Services was an early bidder on the Fairgrounds.

Essentially, the group’s legal argument (see attached file) is that Gov. Arnold Schwarzenegger has hijacked the state’s public bidding process to facilitate a private deal that benefits his campaign finance chairman, Gary Hunt, who has been retained by FMW.

The State Department of General Services is now negotiating with FMW to sell the 150-acre historic Fairgrounds for $96 million.

The group has also filed an open-records lawsuit (see attached file) in Sacramento that aims to secure a series of bid documents and communications that they say proves backroom negotiations went on between FMW and the state.

They specifically want bid scoring sheets — written evaluations and notes on the reviews of the bid proposals. They also want copies of all communications and correspondence between the department and bidders, including emails, reports, memos, letters and even notes.

Department officials argue that those details are exempt from disclosure because giving out specific details of competing bids could adversely affect the ability to sell and negotiate a leaseback.

Fair vendors say the state’s arguments were nothing more than “subterfuge.”

“DGS had already completed its evaluation of the bids and decided to award the contract to FMW,” the suit contends.

After the deal was awarded to FMW, state officials changed their arguments for withholding the same documents by arguing that until the transaction was completed, disclosure would reveal specific details that could adversely affect DGS’s ability to negotiate a sale, according to the suit.